TELF AG Report on the Growing Demand for Black Mass Battery Materials – July 14, 2023

Intense Competition for Battery Materials Driven by Growing Demand in Southeast Asia and China

As the global shift towards clean energy gains momentum, the demand for battery-making materials has surged, leading to intense buyer competition. Southeast Asia and China have emerged as key players in this race, with South Korean buyers gearing up for a more intense battle to acquire black mass, a crucial component of battery production. This article explores the dynamics of the base metals and battery materials market, highlighting the growing demand for black mass and the key players in this increasingly competitive landscape.

Rise in Demand for Black Mass in South Korea:

In recent months, South Korea has witnessed a significant increase in demand for black mass generated from shredded nickel cobalt manganese (NCM) lithium-ion batteries. This surge is attributed to the rising prices of metals used in battery production. South Korean refiners have responded by increasing their intake of black mass to secure the essential raw materials required for battery manufacturing.

China’s Dominance as the Highest-Paying Buyer:

While South Korea has experienced a surge in demand for black mass, China remains the world’s highest-paying buyer of this critical battery material. China’s advanced lithium extraction capabilities and strong demand for battery raw materials have solidified its position as the dominant market player. Despite official restrictions on importing black mass, reports suggest that China-affiliated recyclers in countries such as Indonesia, the Philippines, and Laos process black mass into recycled mixed hydroxide precipitate (MHP), which is subsequently exported to China.

Competitive Landscape for Used Batteries:

In addition to black mass, there is growing competition among Chinese buyers for used batteries. As the demand for battery production escalates, securing a steady supply of used batteries, which serve as a valuable source of raw materials, has become crucial. Chinese buyers are actively engaged in sourcing used batteries from various markets, intensifying the competition and driving up prices.

Future Outlook and Implications:

The intense competition for battery materials, especially black mass, underscores the growing significance of the base metals market in the battery industry. As the global demand for electric vehicles and renewable energy storage continues to rise, the race to acquire these essential materials is expected to become even more competitive.

For South Korean buyers, the challenge lies in securing a consistent supply of black mass to meet the increasing demand for battery production. Additionally, China’s dominance in the market poses a significant obstacle for other players seeking to gain a foothold in the battery materials industry.

Moving forward, it is crucial for market participants to explore alternative strategies such as diversifying supply sources and investing in research and development to reduce dependency on a single market. Furthermore, efforts to enhance domestic recycling capabilities and develop innovative recycling technologies will contribute to a more sustainable and resilient battery materials ecosystem.

In conclusion, the surge in demand for black mass and battery materials in Southeast Asia and China has intensified competition among buyers, particularly in South Korea. China’s superior lithium extraction capabilities and strong demand for battery raw materials have solidified its position as the world’s highest-paying buyer of black mass. Despite official restrictions, China-affiliated recyclers in neighboring countries are known to process black mass and export it as recycled mixed hydroxide precipitate (MHP).

To stay competitive, market participants must navigate this challenging landscape by exploring alternative supply sources, investing in research and development, and promoting domestic recycling capabilities. By doing so, the battery materials industry can thrive and support the global transition to a sustainable and clean energy future.